Mobile Video Offer Ads Get Most Clicks

As more
people turn to handheld screens to watch clips, TV shows, and trailers, the emerging mobile video category is growing quickly. That activity has spurred a parallel rise in mobile video advertising,
expected to reach almost $1.5 billion this year. But the user experience is often less than optimal -- especially when a device isn’t connected to WiFi.

To get a better handle on mobile
video ad performance, the Mobile Marketing Association (MMA) commissioned a study benchmarking against five key
areas: mobile engagement, ad length, operating systems and time of day.

The raw data for the research came from the March 2013 log files (559 million impressions) of six video ad companies:
AdColony, BrightRoll, Brightcove, Hulu, Tremor Video and Videology.

Three-quarters of all ad impressions came from mobile apps, and Apple’s iOS platform accounted for more than 80% of
ad volume. Skippable ads made up more than a third of ad impressions, according to the report released today.

Among the main findings on engagement, the click-through rate (CTR) for mobile
video ranged from 1.4% to 2.7% depending on the ad format. “Value exchange” ads -- those viewed to completion in return for a reward such as points or a coupon -- had the highest CTR,
while skippable interstitial ads had the lowest.

Interstitial ads were defined as those that run between non-video content and occupy a majority of the device screen. The other type of ad
format the study examined is mobile video linear units -- ads that run before, during or after a video.

Completion rates for non-skippable ads were far higher than for skippable ones, at more
than 90% versus 23% and lower. The difference in CTRs was not as dramatic, with those for skippable ads at about 60% the level of click rates for non-skippable ads.

The study also found that
click rates for ads longer than 30 seconds tended to be lower than for shorter ads, whether skippable or not. The CTR for a non-skippable ad less than 15 seconds, for instance, was 2.2% versus 1.3%
for an ad over 30 seconds.

When it comes to time of day, completion rates peaked during late night and early morning hours and were relatively flat during the day. Click-through rates for
phones are highest (2.5%) during the wee hours, while for tablets engagement is highest during late afternoon and prime-time TV (8 p.m.-11 p.m.) hours.

Not surprisingly, engagement declines as
ad frequency rises. CTRs for people shown the same ad more than 25 times fell to 0.5% from a peak of 1.5% for those shown the same ad six to 10 times. And anyone who has watched mobile video knows
more frequency-capping is needed.

Taken as a whole, the MMA hopes the findings help to validate mobile video as a separate ad option along online and video. ”Insights such as these can
help brands make smart decisions around their mobile marketing investments, at a time when consumer time spent on mobile devices is exploding," said Will Kassoy, CEO of AdColony and co-chair of the
MMA Mobile Video Committee.

A separate eMarketer report released Thursday, however, was
a reminder of the growing pains that mobile video still faces. It cites a PricewaterhouseCoopers study, for instance, which reveals that only 12% cited video as their preferred mobile ad format.

“Mobile video ads create unique frustrations. One problem is that video is the most data-intensive form of content, and therefore when users are on 3G or 4G networks, the ad play is on their
dime,” stated the study authored by David Hallerman.

It also noted that video streaming too often stalls, stutters or takes time rebuffering, irritating users. Furthermore, a
recent Mobile Insider column by Harry Kargman highlighted the problem of
“fake” video pre-roll in mobile.

Even so, eMarketer projects mobile video ad spending this year will more than double to $1.44 billion (albeit, starting from a small base) and
climb to $5.4 billion in 2018. This year, video will account for 15.5% of mobile ad budgets, behind search (31%), display (28%), and social (23%).